E N F O R C E M E N T   AND   C O M P L I A N C E

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What are these commitments and what do they do?

Who benefits from these commitments?

How can these commitments help my company?

Can the U.S. Government help me if I have a problem?

How can I get more information?

What are these commitments and what do they do?

These commitments on telecommunications policy, described in a statement issued by Korea's Ministry of Information and Communication on July 14, 1997, provide for non-discriminatory, "national" treatment of foreign companies, the elimination of tariffs, increased foreign ownership of domestic companies, more transparency in government regulations and procedures and stronger protection for intellectual property and proprietary information. These commitments have given U.S. and other foreign suppliers of telecommunications equipment and services the right to increased access to Korea's fast-growing telecommunications market.

The commitments were published after a year-long negotiation between the U.S. and Korean governments, and they are the latest in a series of bilateral telecommunications agreements. They supplement the market-opening steps taken by Korea under the WTO Information Technology Agreement, which entered into force on March 13, 1997, and the WTO Basic Telecommunications Services Agreement, which entered into force on January 1, 1998.

Who benefits from these commitments?

Any U.S. or other foreign company interested in supplying telecommunications equipment or services in Korea can benefit from these commitments.

How can these commitments help my company?

The commitments can help your company in the following ways:

Non-discrimination. The policy statement of the Ministry of Information and Communication affirmed that procurement decisions by private companies should be based solely on commercial considerations, irrespective of the origin of the equipment to be purchased or the nationality of the supplier. Government policy and regulations should not be interpreted to mean a requirement to use telecommunications equipment or services of any particular national origin.

Technical Specifications. The Ministry stated that it will adopt non-discriminatory specifications, will describe them in terms of performance rather than design or descriptive characteristics, and will base them on international standards, where such exist rather than national standards.

Licensing. To ensure transparency, new procedures for licensing facilities-based service providers will ensure that sufficient information is available on the preparation of applications, time frames for awarding licenses and licensing criteria. The source of equipment described in a license application will not be a factor in awarding the license.

Foreign Ownership. Until the end of 2000, Korea will allow foreign ownership in facilities-based telecommunications service providers, other than Korea Telecom (KT), up to a maximum of 33%. After January 1, 2001, the maximum will be 49%. No single person will be allowed to own more than 10% of a wireline service provider, however, or 33% of a wireless service provider.

Korea Communications Commission (KCC). The independent regulatory role of the KCC has been strengthened in the interest of preserving fair competition in the telecommunications sector. Its dispute settlement procedures have been improved, and the scope of issues subject to those procedures has been expanded.

Satellite Services. Facilities-based service providers can use commercial satellite systems other than INTELSAT or Koreasat for voice or data communication. The Ministry of Information and Communication has streamlined the procedures for authorizing such use, and it has made them more transparent.

Government Procurement. As a result of Korea's accession to the WTO Government Procurement Agreement, foreign suppliers can participate in various government contracts for the supply of telecommunications goods and services.

Tariffs. Under the WTO Information Technology Agreement (ITA), Korea eliminated tariffs on a wide range of information technology products (including telecommunications equipment) by the year 2000. Tariffs on a few additional items will be eliminated by 2004. For details, see the Exporter's Guide to the ITA.

Terminal Equipment. The Ministry of Information and Communication has streamlined its type approval system for terminal equipment and has affirmed that it will base approvals for the use of such equipment only on the equipment itself, and not on the service provider that intends to use the equipment.

Intellectual Property and Proprietary Information. The Ministry's policy statement states that government agencies and private companies are prohibited from purchasing information technology products which have been found to infringe on a third party's intellectual property rights. Any infringement of trade secrets or intellectual property rights is actionable under relevant laws, e.g. Korea's Unfair Competition Prevention Act and its Computer Programs Protection Act.

Can the U.S. Government help me if I have a problem?

Yes. If your company is experiencing difficulties supplying telecommunications equipment or services in Korea, contact the Office of Trade Agreements Negotiations and Compliance's hotline at the U.S. Department of Commerce. The Center can help you understand your rights under the Korean Government's policy statement, and it can alert the appropriate U.S. Government officials to help you resolve your problem. The U.S. Government can, if appropriate, raise the particular facts of your situation with the Korean Government and ask Korean officials to review the matter.

How can I get more information?

The complete text of the telecommunications policy statement issued by Korea's Ministry of Information and Communication on July 14, 1997 is available on the Office of Trade Agreements Negotiations and Compliance's web site.

Complete texts of prior U.S.-Korean telecommunications accords are also available. These are:
Three Records of Understanding (ROUs), which summarize understandings reached in the negotiations that led up to the 1992 Understanding on Telecommunications. One is dated January 23, 1990, another February 15, 1990, and another February 7, 1991.

An International Value-Added Network Services Agreement, in the form of an exchange of letters dated June 26, 1991, in which the Korean Ministry of Communications confirms that it will allow companies to provide international value-added services in Korea as of July 1, 1991.

The U.S.-Korea Understanding on Telecommunications, concluded on February 17, 1992, covers value-added services, joint ventures, the use of leased circuits, competition safeguards, standards, equipment approval procedures, acceptance of test data, government procurement and tariff reductions.

A Letter on Telecommunications Procurement to the U.S. Trade Representative from the Korean Ambassador to the United States, dated March 31, 1993, confirming that all applicable regulations concerning the procurement of telecommunications network equipment by Korea Telecom (KT) have been made public and that AT&T would be allowed to bid its switching equipment in upcoming KT procurement.

A Letter on Telecommunications Issues to the U.S. Trade Representative from the Korean Ambassador to the United States, dated March 27, 1995, concerning KT procurement, a decision to hold bilateral talks on mutual recognition of equipment approval and the Korean Government's intention to liberalize its leased line regulations.

An Exchange of Letters on Implementation of the 1992 Understanding on Telecommunications in April of 1996 between the U.S. Trade Representative and the Korean Ambassador to the United States, in which both sides confirm their agreement to begin talks on telecommunications market access issues. These talks led to the issuance of the policy statement by the Korean Ministry of Information and Communication on July 14, 1997. Two Korean Government statements were forwarded in the Ambassador's letter. One described the procurement policies of Korea Telecom (no favoritism for domestic suppliers, no requirement to transfer technology as a condition for receiving a procurement contract, adequate protection of proprietary information and intellectual property, and no application of technical specifications with a view to creating unnecessary obstacles to international trade). The other statement confirmed that the Korean Government would carefully monitor its type approval procedures to ensure, among other things, the protection of confidential information submitted by applicants.

If you have questions about the 1997 commitments of the Korean Government regarding telecommunications, or about any of the other bilateral telecommunications accords listed above, you can e-mail the Office of Trade Agreements Negotiations and Compliance (TANC), which will forward your message to the Commerce Department's Designated Monitoring Officer for these agreements. You can also contact the Designated Monitoring Officer at the following address:

Designated Monitoring Officer -

Korea Telecommunications Agreements

Office of Health and Information Technologies

U.S. Department of Commerce

14th Street & Constitution Avenue, N.W.

Washington, D.C. 20230

Phone: (202) 482 - 1512

Fax: (202) 482 - 5834

The Designated Monitoring Officer can also provide you with useful trade leads and contacts.

You may also wish to consult the following web sites:

The Office of Health and Information Technologies Home Page Located in the International Trade Administration, the Office of Health and Information Technologies (OHIT) helps U.S. companies increase international sales and overseas business opportunities in the health and information technology sectors of computers and networking equipment, microelectronics, telecommunications, instrumentation, medical devices, pharmaceuticals and Health IT by monitoring business and economic trends in the health and IT industries and providing data on trade and global markets and influencing the development of U.S. trade policy in these sectors.

The U.S. Commercial Service, American Embassy, Seoul helps U.S. companies enter the Korean market and expand their sales there.

TANC offers these agreements electronically as a public service for general reference. Every effort has been made to ensure that the text presented is complete and accurate. However, copies needed for legal purposes should be obtained from official archives maintained by the appropriate agency.